Warren Buffet once said price is what you pay, value is what you get. As prices rise in real estate and across the US economy, it helps to keep this in mind.
The pandemic triggered a lot of changes in the economy. People are moving to new places, working in different jobs, and changing their consumption habits. There is also a chronic shortage of housing in a lot of markets across the country.
As an investor, I’m not worried. The cure for high prices is often high prices. That is the magic of markets. High prices are already triggering new investments that will lead to more capacity and more stable prices. The most valuable projects will get done first and strategic investors will continue to do well.
Alliance has decades of experience finding value on the buy-side, the sell-side, and across geographies, in all market conditions.
For now, we may be less likely to invest in new builds, but there is a vast inventory of commercial real estate, and there are plenty of great deals out there.
Whatever the macroeconomic conditions might be, real estate is still a hyper local business. A new build in Boise cannot serve demand in Phoenix.
As always, when we assess potential acquisitions, we look at ways to drive additional value. Price is a key factor, but hardly the only one. There are always great opportunities to be found for those that are strategic and persistent. Alliance will keep doing what has worked so well for us: patient investing in high-growth markets.